Does cryptocurrency owned at death trigger a deemed disposition for Canadian tax purposes?

Generally, yes, on the same basis as other capital property. Under the federal Income Tax Act, a person's capital property is generally deemed to be disposed of at its fair market value immediately before death, which can trigger a reportable capital gain on the deceased's final return even though nothing was actually sold. The Canada Revenue Agency has generally treated cryptocurrency as a form of property — more like a commodity than currency — for tax purposes, so this same deemed-disposition principle is the one that is expected to apply to crypto holdings as well.

This is a genuinely developing area, and specific CRA positions on newer forms of digital assets can continue to evolve, so anyone administering an estate with meaningful cryptocurrency holdings should confirm the current CRA guidance rather than assume older interpretations still apply exactly as before. In practice, this means the estate (or the deceased's final return) may need to report a gain based on the crypto's value on the date of death compared to its original cost, and the same spousal or qualifying-trust rollover rules that can defer this treatment for other capital property may also be relevant. Getting professional tax advice is particularly important here given how quickly this area continues to develop.